KLÖVERN YEAR-END REPORT

Transcription

1 KLÖVERN YEAR-END REPORT

2 Klövern Year-end Report Income increased by 43 per cent to SEK 1,948 million (1,364) during The operating surplus increased by 42 per cent to SEK 1,215 million (857) Profit from property management increased by 20 per cent to SEK 524 million (428) Changes in value of properties amounted to SEK 33 million (435), of derivatives to SEK 175 million ( 225) and of financial assets to SEK 10 million ( ) Net profit for the year amounted to SEK 339 million (465), corresponding to SEK 1.24 (2.89) per common share and SEK 7.52 per preference share ( ) Equity has increased by SEK 1,956 million to SEK 6,696 million (4,740) during the year Klövern has acquired a total of 137 properties for SEK 7,459 million, of which 124 in conjunction with the acquisition of Dagon, and divested eleven properties for SEK 543 million Klövern issued four bond loans for a total of SEK 1,825 million during the year. Net profit Fourth quarter Eight properties totalling SEK 817 million have been taken possession of in the fourth quarter and contracts entered into for acquisition of two properties for SEK 25 million Klövern has issued preference shares for approximately SEK 650 million, divested repurchased common and preference shares for approximately SEK 120 million and divested Diös shares for a total of approximately SEK 21 million During the fourth quarter, Klövern has issued SEK 650 million and SEK 175 million respectively in two unsecured bonds. Events after the end of the year Two properties totalling SEK 37 million have been divested and two properties totalling SEK 25 million have been taken possession of Klövern has concluded a ten-year contract to let 10,700 sq.m. with CGI (formerly Logica) in Kista Klövern has signed a three-year extension of a lease of 7,700 sq.m. with Eniro in the property Hilton 3 in Solna. The lease runs until December 31, 2017 The Board is proposing to the AGM a dividend of SEK 1.50 per common share (1.25) and a dividend of SEK per preference share (10.00). Income ,948 1,364 Costs Net financial income Profit from property management Change in value of properties Change in value of derivatives and financial assets Write-down of goodwill Tax Net profit for the period Cover: Glasblåsaren 7, Linköping. On 1 October, Klövern took possession of six properties, of which two were in Linköping, two in Norrköping and one each in Västerås and Växjö. The properties comprise a total of 45,000 sq.m. and include offices, retail, industry and warehouse facilities. klövern YEAR-END REPORT JANUARY DECEMBER / 2 (16)

3 Statement by the CEO An eventful first year was not only my first year as CEO of Klövern, but also an unusually eventful year for the company. It has been a year of growth and geographical expansion. The tempo has been high and acquisitions frequent, which has had an impact on shareholders, financiers, analysts, the media and not least our personnel. During the year, we have made net acquisitions of properties for almost SEK 7 billion. The single largest acquisition was the listed real estate company Dagon in March. Through the purchase of Dagon, we entered the metropolitan markets of Gothenburg and Öresund, markets, which are self-evident for a company of Klövern s size. This also led to a diversification of the rental stock through 1,900 new customers, a relatively large proportion of these being public sector tenants. Acquisitions were larger than sales in the second and third quarters too and the fourth quarter was no exception. We started the quarter by taking possession of six properties in Linköping, Norrköping, Västerås and Växjö and a month later, we purchased a modern office and logistics property in Mölndal. At the end of the year, we also sold some completely developed properties in central locations in Borås, Linköping and Västerås and we signed contracts for sales in Trelleborg. However, growth has not only come about through acquisitions. As in the past few years, we have also invested large amounts in existing properties, both in the form of new production and by refurbishment of existing buildings. The single largest new construction project is a 27,000 sq.m. office building, which has been completed on behalf of Ericsson in Kista. has as well as been characterized by some lack of liquidity in the banking system. Uncertainty about regulatory frameworks and concern about the indebtedness of European countries as well as the general state of the economy has made banks more restrictive as regards loan volumes. Loan-to-value ratios have decreased, which undoubtedly places new demands on us as a real estate company. In order to broaden our credit base, Klövern therefore during the year has issued four unsecured bonds totalling SEK 1.8 billion. We have also issued preference shares on a number of occasions during the year, thus strengthening equity and the equity ratio. Klövern will continue to focus on geographic concentration in combination with growth on prioritised locations in We will continue to make property management more efficient and diversify our client base further. Last year was to a large extent characterized by integration of Dagon and the other acquisitions made. In 2013, we will make an effort to benefit from our acquisitions and increase profitability. Rutger Arnhult CEO klövern YEAR-END REPORT JANUARY DECEMBER / 3 (16)

4 Klövern is a real estate company committed to, with closeness and commitment, offer the customers efficient premises, in selected growth regions. Klövern is one of the larger real estate companies in Sweden specializing in commercial premises. Income statement items refer to the year January December and are compared with the corresponding period last year. Balance sheet items refer to the position at the end of the year and the comparative figures the most recent year-end. The quarter refers to October-December and the year January December. Dagon s result is included from the date of taking possession, 2 March. Profit Profit from property management, i.e. profit excluding changes in value and tax, increased to SEK 524 million (428) during the year and net profit for the year amounted to SEK 339 million (465). Besides the effect of net acquisitions, profit from property management was affected positively by net moving-in, upward index adjustment of rents as well as a milder winter and negatively by higher financial costs. Net profit for the year was affected by SEK 33 million for changes in value of properties and SEK 175 million for changes in value of derivatives. The operating margin was 62 per cent (63). Operating surplus for a comparable portfolio rose by 6 per cent to SEK 869 million, which is partly attributable to upward index adjustment of rents and positive net moving-in. Income rose by 4 per cent, at the same time as property costs declined by 1 per cent. Fair value increased by SEK 766 million, or 5 per cent, in particular owing to investments which led to higher rental income and lower operating costs. Income and expenses Income during the year increased to SEK 1,948 million (1,364). The increase in income is attributable to net acquisitions, index adjustment of rents and positive net Lease structure (bars) sq.m. (line) Property value and profit Property value, (bars) 25,000 20,000 15,000 10,000 5,000 0 moving-in. Owing to ongoing rental disputes has Klövern reduced income during the fourth quarter by SEK 15 million. Property costs increased to SEK 733 million ( 507) during the year due to acquisitions. Decreased costs as a result of a milder winter and energy savings had the opposite effect. The fourth quarter has been affected by higher maintenance than the average for the other three quarters. Furthermore, projects totalling SEK 10 million have been expensed during the quarter. Property Income, Profit from property mgmt, ,000 1,600 1, COMPARABLE PORTFOLIO Change, % Area, 000 sq.m. 1,514 1,499 1 Fair value, 14,881 14,115 5 Required yield, % 7,1 7,1 0 Economic occupancy rate, % Area-based occupancy rate, % Change, % Income 1,351 1,304 3 Property costs Operating surplus Refers to properties owned for the whole period in and. Net moving-in SEK m Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Moving-in Moving-out Net moving-in klövern YEAR-END REPORT JANUARY DECEMBER / 4 (16)

5 costs include rent losses of SEK 5 million ( 3). Central administration costs amounted to SEK 86 million ( 71), where SEK 14 million of the increase is attributable to specific costs for the acquisition of Dagon. There has been many small moving-in during the quarter, which has led to net moving-in at SEK 5 million (-10). Among those moving in are In3prenör AB at the property Hilton 3, Solna as well as Förenade Care AB at the property Lodet 2 in Täby. The largest vacating tenants are Emerson Process Management AB at Barkassen 8 in Karlstad and PCB in Västsverige AB at Niten 6, Borås. Net moving-in during the year amounted to SEK 69 million (5). The average remaining lease term has, due to completed projects and acquistions, increased to 3.4 years (2.8). The economic occupancy rate was 92 per cent for investment properties and 57 per cent for development properties. The area-related occupancy rate was 87 per cent and 48 per cent respectively. Total economic occupancy rate was 88 per cent (89). During the fourth quarter, Klövern has entered into a contract to let approximately 4,800 sq.m. to Motorola Mobility at the property Idéläran 1, Mjärdevi, Linköping. The term of the contract is five years and the rental value for the whole lease period amounts to over SEK 36 million. Acquisition of Dagon On 2 March, Klövern AB acquired Dagon AB (publ). Klövern owns 99.8 per cent of the share capital and votes in Dagon. Klövern has demanded compulsory purchase of the remaining shares. Due to the ongoing dispute resolution process, the consolidated accounts have been prepared as if 100 per cent had been acquired. The acquired business contributed net sales of SEK 470 million, property from property management of SEK 101 million and profit for the period of SEK 165 million for the year 2 March to 31 December. If the acquisition had taken place on 1 January, the company would have contributed net sales of SEK 564 million, profit from property management of SEK 101 million and net profit for the year would have amounted to SEK 165 million. Dagon was delisted from the stock exchange on 9 June. An arbitration award has been made on 7 January 2013 concerning redemption of the remaining shareholders in Dagon AB. The award is expected to obtain legal force sixty days after the same date and Klövern will then redeem the minority shareholders shares in Dagon for the amount of SEK 80 per share. The total redemption amount amounts at most to SEK 2.6 million. NET ASSETS ACQUIRED, Investment properties 5,711 Deferred tax asset 132 Other assets 128 Interest-bearing liabilities 3,928 Reported deferred tax liability 226 Other liabilities 287 Additional deferred tax according to the preliminary acquisition analysis 404 Acquired net assets 1,126 Paid purchase price 460 Liquid funds in acquired subsidiaries 34 Impact on consolidated liquid funds at the time of acquisition 426 CALCULATION OF GOODWILL, Purchase price paid in cash 460 new issues in connection with acquisition 1,048 loans in connection with acquisition 0 not accepted shares in connection with acquisition 2 Offer value, Dagon s shares, 100 % of the shares 1,510 Acquired net assets 1,126 Goodwill 384 The deferred tax liability in the balance sheet has been adjusted in conjunction with the drawing up of an acquisition analysis and the acquisition being classified as a business combination. Properties and financial instruments have been valued at fair value. Other items in the balance sheet have not been revalued. The fair value of the acquired receivables amounted, as per the acquisition date, to SEK 67 million, which corresponds to the amount that is expected to be paid. Goodwill arises mainly through deferred tax being calculated in accordance with accounting rules and the value attached to deferred tax in negotiations between parties in transactions. In the accounts, deferred tax is calculated as the difference between fair values and tax values. In transactions, deferred tax is usually based on the probability that it will fall due for payment as well as a time factor when any payment will be made. Goodwill is not tax deductible. Cash flow The cash flow from current operations was SEK 712 million (341). Income tax paid amounted to SEK 1 million ( 1). Investment operations have affected the cash flow by SEK 2,457 million ( 953) net, mainly due to acquisitions and investments in existing properties. The cash flow from financing activities has been affected by SEK 2,110 million (587). Altogether, the cash flow for the year totals SEK 365 million ( 25). klövern YEAR-END REPORT JANUARY DECEMBER / 5 (16)

6 Period of fixed interest and tied-up capital Year :Q4 2006:Q2 2006:Q4 2007:Q2 2007:Q4 Fixed interest 2008:Q2 2008:Q4 2009:Q2 Tied-up capital Period of fixed interest, January years 2009:Q4 2010:Q2 2010:Q4 :Q2 :Q4 :Q2 :Q4 Financing At year-end, the interest-bearing liabilities amounted to SEK 15,229 million (9,345). The increase is mainly due to acquisitions but also to investments in existing properties. During the year, Klövern has issued four bonds totalling SEK 1,825 million, which are included in the interest-bearing liabilities. The average financial interest rate for the whole of the financial portfolio amounted to 4.3 per cent (4.2) at year-end. The average fixed-interest term increased to 3.0 years (2.7) on 31 December. After acquisition of additional swaps for SEK 700 million in early January 2013, the fixed-interest term increased to 3.5 years in mid-january. Credit volumes with swap agreements are treated as having fixed interest. The average period of tied-up capital amounted to 2.2 years (1.9) at the end of the year. Unutilized credit volumes, including unused credit facilities of SEK 300 million (250), amounted to SEK 581 million (1,078). As per 31 December fair value for the unemcumbered properties amounted to SEK 1.2 billion. At year-end, Klövern had interest rate caps of SEK 1,355 million (1,500), of which SEK 500 million matures in 2013 and SEK 855 million in The interest rate caps have redemption rates of per cent. Swap agreements totalled SEK 7,420 million (4,800), with an average remaining term of derivatives of 5.1 years. Klövern s interest swaps and interest caps effectively limit the interest rate risk. An increase in the short market rates of one percentage point would increase Klövern s average borrowing rate by 0.5 percentage points and Klövern s financial costs by SEK 76 million. The change in value of derivatives amounted to SEK 175 million ( 225) during the year, of which SEK 78 million ( ) was realized in connection to restructuring of the credit portfolio. On 31 December, the value was SEK 432 million ( 242). Unrealized change in value does not affect the cash flow. On maturity, the value of the derivative is always zero. Hästägaren 3, Mölndal. In November, Klövern took possession of the office and logistics property Hästägaren 3 in Mölndal for SEK 490 million. In conjunction with the acquisition, Kappahl has signed a 15-year lease. FIXED INTEREST AND TIED-UP CAPITAL Fixed interest Tied-up capital Maturity year Loan volume, Interest, % Contract volume, Utilized, Unutilized, Floating 7, ,051 3, ,168 4, , ,722 5, , , , , Total 15, ,810 15, klövern YEAR-END REPORT JANUARY DECEMBER / 6 (16)

7 Property transactions During the year, 137 properties (8) have been acquired, 124 of which being included in the acquisition of Dagon. The total purchase price was SEK 7,459 million (315). Klövern has sold eleven properties (5) during the year at a price of SEK 543 million (48) after deduction of selling costs. Investments and building rights Investments in existing properties often take place in connection with new lettings with the aim of customizing and modernizing the premises and thus increasing the rental value. During the year, a large number of projects, in the form of new construction and refurbishment, were carried out at existing properties. In all, SEK 861 million (685) was invested during the year. A total of 328 projects (214) are in process and SEK 446 million (588) remains to be invested in these projects. Total estimated expenditure the same projects amounts to SEK 1,736 million (1,287). At year-end, assessed building rights and building rights with local plans totalled 1,342,000 sq.m. (936,000). 527,000 sq.m. (355,000) of the building rights are included in local plans. Over half of the building rights consist of offices and almost a third of housing. The building rights are valued at SEK 896 million (497), corresponding to SEK 668 per sq.m. (531). Properties and changes in value As at 31 December, Klövern s portfolio consisted of 387 properties (255). The rental value amounted to SEK 2,468 million (1,554) and the fair value of the properties was SEK 22,624 million (14,880). The total lettable area amounted to 2,529,000 sq.m. (1,561,000). During the year, the changes in value of the properties totalled SEK 33 million (435). The changes in value include realized changes in value of SEK 46 million (5) and unrealized changes in value of SEK 79 million (430). The unrealized changes in value do not affect the cash flow. FAIR VALUE, Fair value on 1 January 14,880 13,493 Acquisitions 7, Investments Sales Changes in value Fair value as at 31 December 22,624 14,880 On average, Klövern s property portfolio has been valued, as at 31 December, with a required yield of 7.2 per cent (7.1). The values of the investment properties have increased slightly, mainly due to positive net moving-in and newly signed leases, which has led to increased rent levels and thus also increased market rent as well as lower operating costs. The required yields have increased slightly in development properties with a relatively high vacancy level, which has had a negative effect on the value. Overall, the unrealized changes in value have had a weak negative development during the year. Klövern values 100 per cent of its property portfolio each quarter, 20 to 30 per cent of which are valued externally. Property holdings sq.m. by type of premises Retail 187,000 sq.m., 7% Industry/warehouse 898,000 sq.m., 36% Offices 1,121,000 sq.m., 44% Education/health care/ other 323,000 sq.m., 13% Contract value by customer category Private companies 1,236, 57% Listed companies 530, 24% Public sector 408, 19% klöverns LARGEST PROJECTS IN PROGRESS City Property Project type Lettable area Project area, property, sq.m. sq.m. Economic occupancy rate after project, % Estimated investment, Remaining investment, Increase in rental value due to project, Rental value after project, Estimated completion, year Kista Isafjord 1 Office/customer center 74,133 36,000 1) ) Linköping Glasbiten 7 Archive 11,612 6, Nyköping Mjölkflaskan 8 Health care 8,035 3, Linköping Idéläran 1 Office 15,658 4, Västerås Vampyren 9 Retail 16,524 2, Linköping Amor 1 Office 3,292 3, Göteborg Ugglum 9:242 Industry/ 15,417 1, warehouse Västerås Klas 8 Office/exercise 5,374 1, Uppsala Fyrislund 6:6 Production/ lab. 57,567 1, Total 207,612 60, Of which 27,000 sq.m. is for a new building and 9,000 sq.m. is for refurbishment of an existing building. 2. Of which SEK 6 million from the third quarter. klövern YEAR-END REPORT JANUARY DECEMBER / 7 (16)

8 Profit and key ratios The tables below show income statement items and key ratios broken down according to Klövern s regions and investment and development properties. Investment properties means properties currently being actively managed. Development properties refers to properties where conversion or extension projects are in process or planned, leading to a higher standard or changed use of the premises. The current operating surplus is affected by projects or restrictions on letting before development of the property. The income statement table shows current operations, including properties sold and investments made during the period. The table with key ratios shows the situation at the end of the respective quarter and the two tables are accordingly not wholly comparable. Comparability between years is limited due to large net acquisitions during. PROFIT PER property segment AND REGION Income, Costs, Operating surplus, Operating margin, % Investments, Investment Development South Investment Development East Investment Development Stockholm Investment Development Central/North Investment 1,817 1, , Development Total 1,948 1, , KEY RATIOS per property segment AND REGION Fair value, Required yield 1), % Area, 000 sq.m. Rental value, Econ. occupancy rate, % Investment 3, Development South 4, Investment 4,045 4, Development East 4,342 4, Investment 7,897 5, Development 1, Stockholm 8,997 6, Investment 4,796 3, Development Central/North 4,950 3, Investment 20,237 13, ,143 1,374 2,218 1, Development 2,387 1, Total 22,624 14, ,529 1,561 2,468 1, ) Required yield are estimated excluding building rights. South: Borås, Gothenburg, Halmstad, Kalmar, Karlskrona and Öresund. East: Linköping, Norrköping and Nyköping. Stockholm: Kista, Storstockholm and Uppsala. Central/North: Falun/Säter, Härnösand/Sollefteå, Säter, Karlstad, Västerås and Örebro. klövern YEAR-END REPORT JANUARY DECEMBER / 8 (16)

9 External valuations have been performed by DTZ Sweden, Nordier, Juris Smitmanis Fastighetskonsult, Savills, CBRE and Widehov Konsult. Every property in the portfolio is externally valued at least once during a rolling 12-month period. DTZ has served as advisor when the required yields have been determined in most of the internal valuations. See Klövern s annual report for for a more detailed description of valuation principles. The share During the year, Klövern s has made a bonus issue and new issues of preference shares. The bonus issue was made to all of Klövern s common shareholders and consisted of 4,163,609 preference shares. In the bonus issue, capital was transferred corresponding to approximately SEK 3,30 per common share to the preference shareholders. New issues refer to the directed new issues in connection with the acquisition of Dagon, a property in DEVELOPMENT OF SHARE CAPITAL Date Event Opening balance No. common shares No. preference shares Acc. share capital, SEK 166,544, ,721, Cash new issue 166,544, ,721, Bonus issue 4,163, ,539, New issue 11,708, ,262, New issue 11,774, ,595, New issue 11,775, ,598, New issue 12,238, ,913, New issue 12,686, ,153, New issue 13,598, ,716, New issue 13,731, ,378, New issue 17,314, ,295, New issue 18,419, ,820, New issue 18,536, ,403, Closing balance 166,544,360 18,536, ,403,490 SHAREHOLDERS No. common shares, thousands No. preferance shares, thousands Share of capital, % Share of votes, % Corem Property Group 32, Arvid Svensson Invest 24,159 2, Rutger Arnhult via companies 15, Länsförsäkringar funds 9, Swedbank Robur funds 6, Handelsbanken funds 4, JPM Chase 3, SEB Investment Management 2, Lantbruksintressenter 2,740 1, BP2S Lux/Fim/ Luxembourg Funds 2, Mellon AAM Omnibus 2, Client OMI for Ishare Europe 1, Aktie-Ansvar funds 1, Pareto Bank 1, Tredje AP-fonden 1, Fonden Zenit 1, Bengt Norman 1, Klöverns' profit sharing system Avanza Pension Invus Investment Total largest shareholders 117,101 4, Other shareholders 44,443 13, Total outstanding shares 161,544 18, Repurchased own shares 5,000 Total registered shares 166,544 18,536 Kista and acquisition of Diös shares as well as to an issue to the public and institutional shareholders. A total of 14,372,729 preference shares were issued in the new issues. As at 31 December, the total number of registered shares in the company was 185,080,698, of which 166,544,360 were common shares and 18,536,338 preference shares. A common share confers a right to one vote and a preference share to a one-tenth of a vote. Klövern s shares are listed on NASDAQ OMX Stockholm Mid Cap. On 31 December, the share price was SEK per common share (25.90) and SEK per preference share ( ), corresponding to a total capitalization of SEK 6,670 million (4,165). At the end of the year, the number of shareholders was 31,700 (27,200) and 81 per cent (84) of the share votes was Swedish-owned. Klövern has sold net 741,463 common shares and 143,536 preference shares during the year, corresponding to 0.4 per cent and 0.8 per cent of the total number of registered common shares and preference shares respectively. Klövern s holding of repurchased common shares amounted to 5 million at year-end (5,741,463), corresponding to 3.0 per cent (3.4) of the total number of registered common shares and zero preference shares ( ). The common shares have been acquired at an average price of SEK per share. klövern YEAR-END REPORT JANUARY DECEMBER / 9 (16)

10 Organization and environment Klövern s business model entails closeness to the customer by having our own staff at all business units. After the merger with Dagon, Klövern has increased the number of business units from ten to 17 allocated to four geographic regions. The regions are South (Borås, Gothenburg, Halmstad, Kalmar, Karlskrona and Öresund), East (Linköping, Norrköping and Nyköping), Stockholm (Kista, Greater Stockholm and Uppsala) and Central/North (Falun/Säter, Härnösand/ Sollefteå, Karlstad, Västerås and Örebro). At year-end, Klövern had 185 employees (132). The average age was 46 (45) and the proportion of women amounted to 41 per cent (44). Since, the company has been certified in accordance with the Swedish Environmental Standard (Svensk Miljöbas). The tax situation Outcome of tax case The Tax Agency has decided not to appeal against the Administrative Court s quashing of the tax surcharge of SEK 493 million previously imposed on Klövern. The matter is thus concluded. Changed corporate tax The Swedish Riksdag has decided to reduce corporate tax from 26.3 per cent to 22.0 per cent as from 1 January As the deferred tax included in Klövern s balance sheet will be settled in the future, it has been revalued in accordance with the new tax rate of 22.0 per cent. The reduction in corporate tax has affected Klövern s deferred tax claim by SEK 83 million. Deferred tax liability has decreased by SEK 217 million, leading to an increase in profit by SEK 39 million after impairment of goodwill by SEK 95 million. Tax for the year Calculation of tax for the year includes recalculation due to changed corporate tax. Deferred tax of SEK 73 million ( 8) has been charged to profit on current real estate operations. Furthermore, among other things, the change in the difference between fair value and residualvalue of properties and derivatives for tax purposes has entailed an effect on deferred tax of SEK 183 million ( 165). In total, deferred tax of SEK 110 million ( 173) and current tax of SEK 2 million ( ) has been included. Other matters During the year, Klövern has acquired a total of 8,671,889 shares net in Diös Fastigheter AB (publ). These acquisitions has been partly paid with 2,740,000 repurchased common shares and 448,000 newly issued preference shares. Realized change in value during the year amounts to SEK 1 million ( ) and unrealized change in value to SEK 9 million ( ). The average acquisition price amounts to SEK Significant risks and uncertainty factors A property company is exposed to various risks and opportunities in its business activities. Internal regulations and policies limit exposure to different risks. Klövern s significant risks and exposure and their management are described on pages of the Annual Report. The exposure has changed due to the acquisition of Dagon, inter alia. Klövern has strengthened the equity through new issues of preference shares and changed the composition of debt by issues of unsecured bonds. Accounting policies This interim report for the Group has been prepared in accordance with the Annual Accounts Act and IAS 34 Interim Financial Reporting and, in the case of the parent company, the Annual Accounts Act. The accounting policies applied in this interim report are in essential parts those described in note 1 of Klövern s Annual report for. Events after the end of the year After the end of the year, Klövern has taken possession of two properties with an acquisition price of SEK 25 million. At the beginning of 2013, Klövern has also vacated two properties with a sales price of SEK 37 million. Klövern has signed a contract to let 10,700 sq.m. with the business processes and IT services supplier CGI (formerly Logica) in Kista. The lease has a term of ten years and CGI is expected to move in at the year-end 2013/2014. Klövern has signed a three-year extension of 7,700 sq.m. with Eniro in the property Hilton 3 in Solna. The lease runs to 31 December An arbitration award has been announced on 7 January 2013 concerning redemption of the remaining shareholders of Dagon AB. The award is expected to attain legal force 60 days after the same date and Klövern will then redeem the minority shareholders shares in Dagon at SEK 80 per share. The total redemption amount can amount to at most SEK 2.6 million. klövern YEAR-END REPORT JANUARY DECEMBER / 10 (16)

11 Dividend The Board of Directors is proposing to the Annual General Meeting, for the financial year, a dividend of SEK 1.50 per common share (1.25) and a dividend of SEK per preference share (10.00), to be paid at SEK 2.50 per quarter. It is proposed that the record date for dividend to common shareholders be 22 April 2013 and the estimated payment date 25 April The record date for dividend to preference shareholders is the last weekday of the respective calendar quarter and the payment date around three days thereafter. During the fourth quarter of, a dividend of SEK 2.50 ( ) has been paid per preference share, totalling 46 million ( ). Annual General Meeting of Shareholders and annual report The 2013 Annual General Meeting will take place in the New York room at the World Trade Center, Klarabergsviadukten 70 in Stockholm at 4 pm on 17 April Notice of the Annual General Meeting and prerequisites for notifying attendance will be advertised in the Swedish Official Gazette, Post & Inrikes Tidningar, and on Klövern s website, klovern.se. Information about this notice is provided in an advertisement in Svenska Dagbladet. Shareholders wishing to make proposals to the Nomination Committee may do so by to styrelsenominering@klovern.se. The Annual Report for, in Swedish, will be available on Klövern s website from week 12. Nyköping, 13 February 2013 The Board of Directors of Klövern AB (publ) klövern YEAR-END REPORT JANUARY DECEMBER / 11 (16)

12 Consolidated Statement of Income 3 months 3 months 12 months 12 months Income ,948 1,364 Property costs Operating surplus , Central administration Net financial items Profit from property management Changes in value, properties Changes in value, derivatives Changes in value, financial assets Write-down of goodwill Profit before tax Current tax Deferred tax Net profit for the period Other comprehensive income Comprehensive income for the period Earnings per common share, SEK Earnings per preference share, SEK No. of common shares outstanding at the end of the period, million No. of preference shares outstanding at the end of the period, million Average no. of outstanding common shares, million Average no. of outstanding preference shares, million There are no outstanding warrants or convertibles. Consolidated Balance Sheet Assets Goodwill 289 Investment properties 22,624 14,880 Machinery and equipment 14 8 Deferred tax assets Financial assets at fair value through statement of income 330 Other receivables Liquid funds Total assets 24,222 15,390 Shareholder s equity and liabilities Shareholder s equity 6,696 4,740 Minority interest 0 Deferred tax liability 1, Interest-bearing liabilities 15,229 9,345 Derivatives Accounts payable Other liabilities Accrued expenses and prepaid income Total shareholder s equity and liabilities 24,222 15,390 klövern YEAR-END REPORT JANUARY DECEMBER / 12 (16)

13 Change in Consolidated Shareholders Equity Shareholders equity ,516 Dividend 241 Net profit for the year 465 Shareholders equity ,740 New issue 1,965 Repurchase/acquisition of own shares 39 Dividend 387 Net profit for the year 339 Shareholders equity ,696 Consolidated Statement of Cash Flow 3 months 3 months 12 months 12 months Current operations Profit from property management Adjustment for items not included in the cash flow Income tax paid Cash flow from current operations before change in working capital Changes in working capital Change in operating receivables Change in operating liabilities Total change in working capital Cash flow from current operations Investment operations Divestment of properties Acquisition of and investment in properties ,541 1,000 Acquisition of subsidiaries 426 Acquisition of machinery and equipment Investments in financial assets Cash flow from investment operations , Financing operations Change in interest-bearing liabilities , Realised changes in value, derivates Repurchase/sale of own shares New issue of preference shares Dividend Cash flow from financing operations , Cash flow for the period Liquid funds at the beginning of the period Liquid funds at the end of the period klövern YEAR-END REPORT JANUARY DECEMBER / 13 (16)

14 Parent Company Statement of Income 3 months 3 months 12 months 12 months Net sales Cost of services sold Gross profit Central administration Operating profit Financial income Financial costs Profit after financial items Current tax Deferred tax Net profit for the period Other comprehensive income Comprehensive income for the period Parent Company Balance Sheet Assets Machinery and equipment 4 2 Participation in group companies 1, Participation in other companies 294 Receivables from group companies 7,085 4,110 Deferred tax assets Accounts receivables Liquid funds Total assets 9,760 4,847 Shareholders equity and liabilities Shareholders equity 5,086 3,086 Interest-bearing liabilities 3,841 Liabilities to group companies 685 1,719 Accounts payable 8 8 Other liabilities Accrued expenses and prepaid income Total shareholders equity and liabilities 9,760 4,847 Acquisition analysis Acquired net assets, Investment properties 5,711 Deferred tax asset 132 Other assets 128 Interest-bearing liabilities 3, 928 Reported deferred tax liability 226 Other liabilities 287 Additional deferred tax according to the preliminary acquisition analysis 404 Acquired net assets 1,126 Paid purchase price 460 Liquid funds in acquired subsidiaries 34 Impact on consolidated liquid funds in acquisitions 426 Estimate goodwill, Purchase price: paid in cash 460 issues in connection with the acquisition 1,048 loans in connection with the acquisition 0 not accepted shares in connection with the acquisition 2 Offer value, Dagon s shares, 100 % of the shares 1,510 Acquired net assets 1,126 Goodwill 384 Please see p.5 for more information about the acquisition of Dagon. klövern YEAR-END REPORT JANUARY DECEMBER / 14 (16)

15 Key ratios months months Property Number of properties Lettable area, 000 sq.m. 2,529 1,561 2,529 1,561 1,528 1,392 1,382 1,394 Rental value, 2,468 1,554 2,468 1,554 1,486 1,385 1,360 1,309 Fair value properties, 22,624 14,880 22,624 14,880 13,493 12,032 11,895 12,154 Direct yield requirement valuation, % Operating margin, % Occupancy rate, economic, % Occupancy rate, area-based, % Average lease term, years Financial Return on equity, % Equity ratio, % Adjusted equity ratio, % Leverage, % Leverage properties, % Interest coverage ratio, multiples Average interest, % Average fixed-interest period, years Average period of tied-up capital, years Interest-bearing liabilities, 15,229 9,345 15,229 9,345 8,517 7,646 7,645 7,007 Share Earnings per common share, SEK Earnings per preference share, SEK Profit from property management per common share, SEK Equity per share, SEK Share price common share at end of period, SEK Share price preference share at end of period, SEK Market capitalization, 6,670 4,165 6,670 4,165 5,467 3,682 2,929 4,227 Total no. of registered common shares at end of period, million Total no, of outstanding common shares at end of period, million Total no, of registered preference shares at end of period, million Total no, of outstanding preference shares at end of period, million Dividend per common share, SEK 1.50* Dividend per preference share, SEK 10.00* Dividend in relation to profit from property management, % 83* * proposed dividend. klövern YEAR-END REPORT JANUARY DECEMBER / 15 (16)

16 Definitions Property Area-based occupancy rate Let area in relation to total lettable area. Development properties Properties where conversion or extension projects are in process or planned, which lead to a higher standard or changed use of the premises. Direct yield requirement, valuation The required yield of property valuations on the residual value. Economic occupancy rate Lease value in relation to rental value at the end of the period. Investment properties Properties currently being actively managed. Lease value Rent for premises, index and rent supplement according to lease. Net moving-in Lease value of tenants moving in less lease value of vacating tenants. Operating margin Operating surplus in per cent of total income. Operating surplus Total income less rent losses, operating and maintenance costs, property administration, site leasehold charges and property tax. Profit from property management Profit before changes in value and tax. Interest coverage ratio Profit from property management plus financial costs in relation to financial costs. Loan-to-value ratio Interest-bearing liabilities in relation to the fair value of the properties at the end of the period. Loan-to-value ratio, properties Interest-bearing liabilities after deduction for the market value of the listed share portfolio, liquid assets and unsecured financing in properties in relation to the fair value of the properties at the end of the period. Return on equity Profit for the period in relation to average equity. Share Earnings per common share Profit for the period, after deduction for earnings to preference shares, in relation to average number of outstanding shares. Earnings per preference share The periods accumulated share of yearly dividend of SEK 10 per preference share calculated on outstanding preference shares at the end of each quarter. Equity per share Shareholders equity in relation to outstanding common and preference shares at balance sheet date. Preference shares in connection with the liquidation of the Company, preferential rights to SEK 150 of equity plus the period s share of accumulated entitlement to annual dividend of SEK 10. Realized change in value Property sales during the period after deduction of the properties most recent reported fair value and selling expenses. Härnösand/Sollefteå Rental value Lease value plus assessed market value for space not rented at end of period. CENTRAL/NORTH Unrealized change in value Change in fair value of the property portfolio after deduction of investments made. Finance Equity ratio Reported equity in relation to reported total assets at the end of the period. Equity ratio, adjusted Reported equity adjusted for the value of derivates and deferred tax liabilities exceeding 5 per cent of the difference between taxable value plus aquired temporary differences and fair value of the properties in relation to reported total assets at the end of the period. Karlstad r Göteborg Halmstad Öresund Falun/Säter Västerås Örebro Borås SOUTH Uppsala psal Nyköping N Norrköping k Linköping Kalmar Karlskrona Kista Storstockholm EAST STOCKHOLM klövern YEAR-END REPORT JANUARY DECEMBER / 16 (16)

17 Calendar Final day for trading conferring right to dividend for preference shareholders (proposed) 25 Mar 2013 Record day for dividend to preference shareholders 28 Mar 2013 Expected dividend payment date from Euroclear for preference shareholders 4 Apr 2013 Interim report Jan-Mar April 2013 Annual General Meeting April 2013 Final day for trading conferring right to dividend for preference shares 25 June 2013 Record day for dividend for preference shareholders 28 June 2013 Expected dividend payment date from Euroclear for preference shareholders 3 July 2013 Interim report Jan-Jun July 2013 Final day for trading conferring right to dividend for preference shareholders 25 Sep 2013 Record day for dividend to preference shareholders 30 Sep 2013 Expected dividend payment date from Euroclear for preference shareholders 3 Oct 2013 Interim report Jan-Sep Oct 2013 Final day for trading conferring right to dividend for preference shares 20 Dec 2013 Record day for dividend to preference shareholders 30 Dec 2013 Expected dividend payment date from Euroclear for preference shareholders 7 Jan 2014 Year-end report Feb 2014 Final day for trading conferring right to dividend for preference shares 26 Mar 2014 Record day for dividend to preference shareholders 31 Mar 2014 Expected dividend payment date from Euroclear for preference shareholders 3 Apr 2014 Contact persons Rutger Arnhult, CEO , rutger.arnhult@klovern.se Britt-Marie Nyman, Finance and IR Manager, Deputy CEO , , britt-marie.nyman@klovern.se This information in the interim report is such that Klövern AB (publ) is obliged to publish under the Securities Market Act and/or the Financial Instruments Trading Act. The information was made available for publication on 13 February Klövern AB (publ), Box 1024, SE Nyköping, Sweden Telephone Fax Reg.no Registered office: Nyköping klovern.se info@klovern.se